New economic research, data, events and analysis from a London-based economist

Saturday, June 09, 2007

Lant Pritchett: ' Let Their People Come'

World Bank guru Lant Pritchett becomes Professor of the Practice of Economic Development at Harvard's Kennedy School of Government next month. I haven't met him, but immediately warmed to him when I read this ending to his short bio:

...Lant has been married since 1981 to Diane Tueller Pritchett and together they have three children. And nothing else. Some bios list non-family and non-professional accomplishments like climbing Everest or playing the cello making it seem as if all of the rest was just tossed off. I believe the only point of this is to make the rest of us, who collapse on the couch and watch Friends reruns at the end of the day, feel like slackers. I think getting the above done while being a husband and father to three children is plenty.

Lant makes an excellent case for expanded immigration in rich countries, while he makes clear that he is fully aware of the social and distributional consequences. The book is especially good in showing how labor flows have historically played an important role in income convergence within the United States.

...Lant is a terrific economist--not just smart, but with incredible knowledge of the real world and common sense. He is one of those rare people whose work appeals to everyone who works on development, regardless of their methodological or ideological leanings. It doesn't matter if you are a micro person into randomized evaluation or a growth person; skeptical of globalization or in love with it; a hard-core economist or a management type. You simply love his work. No wonder the New York TImes Magazine is doing a profile on him and his work. Look for it.

Lant Pritchett says he has a better idea. ...To those standard solutions, trade and aid, Pritchett would add a third: a big upset-the-applecart idea, equally offensive to the left and the right. He wants a giant guest-worker program that would put millions of the world’s poorest people to work in its richest economies. ...Pritchett’s nearly religious passion is reflected in the title of his migration manifesto: “Let Their People Come.” It was published last year to little acclaim — none at all, in fact — but that is Pritchett’s point. In a world in which rock stars fight for debt relief and students shun sweatshop apparel, he is vexed to find no placards raised for the cause of labor migration. If goods and money can travel, why can’t workers follow? What’s so special about borders?

When they are being polite, Pritchett’s friends say he is, ahem, ahead of his time. Less politely, critics say that an army of guest workers would erode Western sovereignty, depress domestic wages, abet terrorism, drain developing countries of talent, separate poor parents from their kids and destroy the West’s cultural cohesion. Pritchett has spent his career puncturing the panaceas of others. It says something about the intransigence of much of the world’s poverty that he may be in the grip of his own.

...Pritchett sees five irresistible forces for migration, stymied by eight immovable ideas. The most potent migration force is the one epitomized by Nepal: vast inequality. In the late 19th century, rich countries had incomes about 10 times greater than the poorest ones. Today’s ratio is about 50 to 1, Pritchett writes in “Let Their People Come.” The poor simply have too much to gain from crossing borders not to try. What arrests them are the convictions of rich societies: that migration erodes domestic wages, courts cultural conflicts and is unnecessary for — perhaps antithetical to — foreign development. When irresistible force meets immovable object, something gives — in this case legality. Migration goes underground, endangering migrants and lessening their rewards.

The key to breaking the political deadlock, Pritchett says, is to ensure that the migrants go home, which is why he emphasizes temporary workers (though personally he would let them stay). About 7 percent of the rich world’s jobs are held by people from developing countries. For starters, he would like to see the poor get another 3 percent, or 16 million guest-worker jobs — 3 million in the U.S. They would stay three to five years, with no path to citizenship, and work in fields with certified labor shortages. He assumes that most receiving countries would not allow them to bring families. Taxpayers would be spared from educating the migrants’ kids. Domestic workers would gain some protection through the certification process. And a revolving labor pool would reach more of the world’s poor.

In effect, Pritchett is proposing a Saudi Arabian plan in which an affluent society creates a labor subcaste that is permanently excluded from its ranks. His does so knowing full well that his agenda coincides with that of unscrupulous employers looking to exploit cheap workers. Many migration advocates oppose a plan, now dividing Congress, to create a guest-worker force a 15th as large as the one Pritchett wants, saying it would create a new underclass. But Pritchett calls guest work the only way to accommodate large numbers. To insist that migrants have a right to citizenship and family unification, he says, is to let men like Gure Sarki go hungry. It is cruel to be kind. The choice is theirs. Let the poor decide. “Letting guest workers in America doesn’t create an underclass,” he says. “It moves an underclass and makes the underclass better off.”

Part of Pritchett’s argument is mathematical. Drawing on World Bank models, he estimates his plan would produce annual gains of about $300 billion — three times the benefit of removing the remaining barriers to trade. But the philosophical packaging gives his plan its edge. Pritchett assails a basic premise — that development means developing places. He is more concerned about helping Nepalis than he is about helping Nepal. If remittances spur development back home, great, but that is not his central concern. “Migration is development,” he says.

Indeed, Pritchett attacks the primacy of nationality itself, treating it as an atavistic prejudice. Modern moral theory rejects discrimination based on other conditions of birth. If we do not bar people from jobs because they were born female, why bar them because they were born in Nepal? The name John Rawls appears on only a single page of “Let Their People Come,” but Pritchett is taking Rawlsian philosophy to new lengths. If a just social order, as Rawls theorized, is one we would embrace behind a “veil of ignorance” — without knowing what traits we possess — a world that uses the trait of nationality to exclude the neediest workers from the richest job markets is deeply unjust. (Rawls himself thought his theory did not apply across national borders.) Pritchett’s Harvard students rallied against all kinds of evils, he writes, but “I never heard the chants, ‘Hey, ho, restrictions on labor mobility have to go.’ ”

Even friends fear he has not come to grips with the numbers. The West is nowhere close to accepting Pritchett’s 16 million — and the developing world has a labor force of nearly 3 billion; what if most of them moved? “I think Lant overdoes it in estimating migration’s potential,” said Nancy Birdsall, president of the Center for Global Development in Washington, which commissioned and published the book. “Do you think the U.S. would accept 300 million of the world’s poorest people?” Birdsall praises Pritchett’s work as a conversation starter but adds, “People think about development as being about place not person — they’re more right about this than Lant believes.”

The Times piece ..politely leaves the impression that this "eccentric" idea is "ahem, ahead of its time", and that poor Lant is in the grips of an impossible "panacea". ...Let's look beyond the gasps, then, and look this proposal straight in the eye. Here are a few things you might notice:

1. What we have today looks a lot like it 2. It has worked in the past as a development strategy 3. Migrants understand what's good for them better than you and I do

...Bottom line: Lant Pritchett's proposal is not the magic bullet that will "develop" the low-income world. That doesn't exist and never will. What Lant is proposing is analogous to using ten spaces in a partially-full lifeboat to save ten people from the Titanic, out of a hundred people left on board. Don't tell him that the boat can't hold ten more; other boats have done so before. And it rings hollow to criticize him for failing to save the other 90. The alternative isn't saving all 100, because our tools for doing that from the outside are weak and slow. The alternative is consigning all 100 to their fates, and rowing away.

Comments

Before 1965, U.S. immigrants had similar skill and education levels with the non-immigrant population. However, after 1965, there were higher quotas of high-skilled and low-skilled immigrants, at the expense of average-skilled immigrants. It seems, immigrants are more willing to work and work hard. However, studies show the social costs of poor immigrants, particularly for health care and education, given higher fertility rates, far exceed what they pay in taxes. Consequently, unrestricted open borders may be costly, and increase poverty, in rich countries.

Samib, that article makes no adjustments in skill differences over time. If the U.S. population doubled with people who had similar skills, GDP would double and per capita income would be the same. However, it seems, if the U.S. population doubled with people who had higher skills, GDP would more than double and per capita income would rise, etc. Also, immigrants with higher education, more wealth, greater productivity, etc. would have a similar effect.

As millions of people who want to lose weight, but youDid he can not succeed in a kind of worry about your weight yanıyorsunuz more? You might think, and this process will be much easier to lose weight in a healthy way to get over ... Now a much more difficult as it used to have a nice view, but you have to do is that you want to attenuation.

Disclaimer

This is a personal web site, produced in my own time and solely reflecting my personal opinions. Statements on this site do not represent the views or policies of my employer, past or present, or any other organisation with which I may be affiliated. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.